Internet Strategy

Introduction
Online shopping has been a growing feature of the food system for a number of years. That growth has dramatically accelerated in the Covid 19 pandemic. Instacart, a US platform company in which gig workers shop for you and deliver your groceries, increased its revenue from almost $1000 million to $1500 million over the pandemic. Ocado, a British company operating perhaps the most hi tech robotised warehousing operation for food distribution in the world, has also been experiencing dramatic revenue growth. Though some people will go back to using supermarkets once this god awful virus blows over, it is likely that many people will continue to buy their food online. Online shopping is here to stay, and the space is dominated by a combination of centralised corporate power and massive platform companies providing precarious gig work. Throughout the alternative food system community, small and medium size businesses across the world have scrambled to react to this dramatic shift in customer behavior. The opportunity to grow sustainable, local food systems by catering to this shift in consumer behavior is potentially profound. Social, ecological and economic benefits of small scale independent producers abound. However, the economic and political advantages of scale have been a relentless and unsentimental driving force in our economy since at least the advent of the industrial revolution. Perhaps the most dramatic example of how this dynamic is played out in our food system within living memory was the growth of supermarkets over the latter half of the 20th century. How can we respond strategically to this situation, to grow the alternative food system? This analysis takes two core values for granted:


 * 1) Agroecological food production. We take this as an essential component of a sustainable food system, critical for the preservation and well-being of future generations.
 * 2) Decentralisation of Power. After decades of the broken promises of corporate green washing, the ongoing devastation of the natural world by multinational food companies, and their corrupting influence over our political regulatory system, we conclude that centralised corporate power is an intractable hindrance to the development of a just and sustainable food system.

These positions are by no means self-evident, but the research and arguments that underpin them is beyond the scope of this analysis. The purpose of this document is to explore strategy options for collective action in the growing online retail market to foster the growth of a decentralised agroecological food system, and to provide information to agroecological businesses entering the internet market.

Network Benefits
Developing collaborative networks is a way for us to capture some of the economic and political benefits of scale, without the centralisation of power. Labor unionisation is an obvious example of a way to develop the political power of scale by a collaborative community working collectively against centralised power. A business to business transaction, whether the sale of a product, a machinery pool, labor swapping or contract work, are all examples of ways in which independent businesses can take advantage of the economic benefits of a decentralised network. Put simply, if we work together, or for each other, we don't all have to do everything, so each of us can focus our investments (of time and money) on getting better at a smaller range of things. The theory is that everyone in a collaborative network can benefit from doing a smaller range of things better. A comprehensive internet strategy for developing a decentralised, agroecological food system would cover knowledge exchange networks, business to business exchange networks, political organising, and shared digital retail systems. These are all multifaceted projects, including technical software challenges, logistical systems, infrastructure, and, fundamentally, community relationship building.

Decentralised Online Retail Platforms
For the sake of this discussion, companies like Uber, Delivaroo, or Instacart are centralised internet platform companies. In some sense, all platform companies are decentralised in that aspects of operational management are not centrally controlled, but are left to a network of independent gig workers. To be a centralised platform company means that certain key powers over an organisation reside with its executive. If Uber were owned by its drivers, customers, or some combination of them, and this community had control over the company strategy, and the distribution of its profits, that would make it a decentralised platform company.

Software, like knowledge, is expensive to produce, but almost free to replicate. For this reason, it makes sense for our software resources to be developed as a shared global resource. The most obvious way to achieve this is by ensuring that the software we use has an appropriate open source license to prevent anyone gaining the intellectual property to control our software. At this level, the decentralisation of control is international, and is most easily achieved through software licensing that mitigates for the centralisation of intellectual property. There is a similar and related issue which is to do with source code. Put simply, open source code allows anyone with the appropriate programming skill to modify a program, whereas closed source code means that only people with the secret sauce can make changes to the program. It is analogous to whether or not a piece of software is password protected. Closed source code enables people to control who can and cannot make changes to a program, and it is a feature of how a program is written as opposed to an intellectual property regime that is enforced by state institutions. A wide range of licenses have been developed to protect open source software from intellectual property vultures, and the details of the differences between these licenses is significant, but beyond the scope of this document. In general, to develop an online retail system that decentralises power within the food system, we want open source software that is licensed under an appropriate open source license.

Next, in order to enable the development of a decentralised agroecological food system, an online retail platform must have the technical features that enable it to meet the business needs of ecological farmers. To achieve this, the software must be developed with features that meet the needs of producers, processors and retailers within a decentralised food system. Ideally the people leading the design and development of the software should have lived experience of running local food enterprises.

A leading example of an online food retail platform that is working to do exactly that is the Open Food Network. Other retail platform systems, such as Boxmaster Systems and Ooooby are designed for specific business models, and may have better functionality for your business for this reason. These platform are not protected by an open source license, however. Significant growth in the use of this platform would therefore centralise a certain amount of power and control over the share of the market that is administered through their system, which does not necessarily entail an abuse of power, but it does make it possible. Oooobry where required to be a private company as a condition of funding, though they have a plan to become a producer owned organisation. They are also keen to participate with the data food consortium project.

Another way to decentralise power within online food retail systems is through data interoperability. Any producer that has attempted to sell through multiple online platforms will know that managing the stocking levels across multiple platforms to avoid accidentally selling produce twice, is tedious and time consuming. This practicality tends to lock a producer into using a single platform. The data food consortium is an initiative to develop a standard computer language for food products. If a platform adopts this language, it will be possible for a producer to maintain a single stock list for multiple platforms, and for those platforms to automatically update each other as customers make purchases.Though less robust than open source software code and licensing as a mechanism to mitigate for the centralisation of power, if platforms adopt these standards, this will support the proliferation of multiple small initiatives over the development of monolithic monopolies. For both practical and strategic reasons, whether or not a platform intends to adopt the data food consortiums open standards should be an important consideration when a producer is selecting a platform.

Challenges
In order for an online platform to support the growth of the alternative food system, it must support both new food businesses and existing producers and retailers.

For example, I work at a vegetable farm in north west wales. The vast majority of our sales are made through a monthly subscription pack-your-own box scheme and self service farm shop. Our prices are high, but we only need about 150 people to buy our box, and there are enough people around us that we can find this many customers. This combination of premium prices, low overheads, and a small but loyal customer community makes our business work. As far as I know, we are the largest commercial organic horticulture operation in the area. In other parts of the country, growers are setting up or joining a food hub. Food hubs take many forms but, in principle, they are ways of several different food producers offering their produce for sale to shoppers and buyers through a single outlet - usually an online outlet. We would be unlikely to start a food hub, because our business is working, and the risk of transitioning to a different retail system outweighs the potential benefits. I think if someone else set up a food hub in the area, we would put some of our gluts and surplus on it, and in time we might start growing some products specifically for that market.

Assuming that there are a lot of existing local food businesses who would perceive transitioning to an online local food retail network, there are certain questions we need to ask. If a decentralised online retail platform is to foster growth of the local, sustainable food systems, what is the proper relationship between this organisation and existing local food businesses? Under what circumstances would such a food hub help an existing local food business, and under what circumstance would one compete with existing businesses? It seems to me that in our area, there are not enough local producers for the benefits of a food hub to be worth the risks. However, I expect a food hub could stimulate a growth in the number of local food businesses, both by supporting local farmers to transition to a local sales model, and by supporting local startups. How could such an initiative do that, without competing for our existing customers? How many local producers does there need to be in an area to make the benefits of a shared marketing platform outweigh the risks? Answering these questions is how we get a handle on identifying where a food hub will effectively support the local food system, and where one won’t.

Potential
The purpose of this is to facilitate dramatic growth of the alternative food system. The alternative food system as it stands relies on the commitment of a niche customer base of people who care a lot about their food, which makes them amenable to the inconveniences of our marketing systems, and willing to pay our prices. This industry also relies on a labour force, many of whom are willing to work long hours for little money because we care about the food system. If we want to grow to a point where we are actually competing with supermarkets for market dominance, these barriers of high prices, low wages, and inconvenience to customers must be addressed. The way food hubs address customer convenience is obvious, having a single online shop that amalgamates a wide range of local produce demands a lot less of a customer, and can potentially put their entire weekly shop into a single collection or delivery. On long working hours, high prices and low wages, the benefits of shared logistical systems could make a significant contribution. The labour involved in both the administration and logistics of packing and delivering a box, or running a shop, can be really high. Many of us are not at a scale where it is worth our investing in basic equipment (passive conveyors, portioning machines, reliable vans, pallet tipers, etc) to reduce this labour burden. If someone else were paid to do that job for us, we may however be able to use that spare capacity to increase production, invest in our own infrastructure and equipment, and ultimately be able to increase our wages and reduce our prices. Having these shared marketing platforms in place should also help startups to succeed, and farmers to transition to local sales. The larger the network of producers, the more everyone in that network will benefit. This is not just because of the more comprehensive range of produce available from a shared online shop, or the greater amount of capital that is made available for a shared logistical system, but also because it can foster business-to-business transactions. For example, if there is only one local farm, it will likely take on a wide range of jobs, making compost, running a plant nursery, organising its own storage, repairing its machinery, etc. However, with a network of local farms, one might produce the plugs, another the compost, another might invest in a root store, whilst another focuses on agricultural engineering. If all these farms are networked, and able to buy and sell products and services from each other, they will be able to afford the investments (of time and money) to get better at the smaller range of things each one does.

Conclusion
An employee of the Open Food Network recently told me that he recommended Boxmaster Systems to someone. I am not sure whether or not it is appropriate for the Land Workers Alliance to be that balanced in our recommendations. We can say that if you run a veg box delivery service, and do not want to sell additional produce to your customers beyond this or develop a network of local producers, then Boxmaster Systems is likely to work better for your business at the moment. However, they do not have the commitment to open source code, open source licensing and transparency that the open food network have, they do not offer the same capacity for a network of producers to share a retail platform and logistical system, and they are a for profit company, unlike the Open Food Network. A large portion of the membership of the LWA are for profit companies, and we should not have an ideological opposition to them. However, supermarkets have demonstrated how vulnerable we are when for profit companies are allowed to take control of that critical relationship between producers and consumers. Also, if a software system is set up as a for-profit enterprise and if the software is proprietary (not open source) then, however good the principles and ethics of the people running that enterprise, there is always the risk that the enterprise can be sold off or taken over by another enterprise which would then own and control the software; make the decisions about the pricing of the software; decide the future direction of the software development and decide who can and cannot use the software. For these reasons, we should have high expectations around governance and intellectual property before we give our full support to an online retail platform.

If there are alternatives to the Open Food Network that are not-for-profit, open source, transparent organisations developing software specifically to facilitate collaboration on retail logistics and administration for ecological producers to develop local markets, we should definitely support those too. The alternatives to the Open Food Network that meet these criteria are significantly smaller than the OFN, and their software systems are significantly less developed. This means that producers or retailers making use of these systems are much more likely to run into challenging technical problems with the software, and will miss out on many of the benefits of OFN, like integration with accountancy software, or automatically splitting payments between a producer and a retailer. We could say that, if you have a stable and functioning local food business already, we only recommend transitioning to an online retail platform if you can see clear benefits. In practice, such a recommendation is likely to be redundant.

It is always a tragedy when one local farm startup competes for a small pool of ethical customers of an existing local producer, and one or the other ends up closing down. The market for ethical food products is growing, though it is not growing fast enough to support dramatic growth of the alternative food system. Reducing the barriers for those customers to grow the market, and supporting collaboration between producers by developing shared online retail platforms and logistical systems, seems like an important strategic goal. This is why I would recommend the landworkers’ alliance collaborate closely with, and lend its full support to the Open Food Network. https://community.openfoodnetwork.org/uploads/default/original/2X/c/c0b5dbc791b364f77aea4584cf500663b163fa84.pdf